Stefania Sigurdson Forbes

While many Spa and Salon businesses recognize the need to measure KPIs, the truth is many rely more on intuition than analyzing the numbers. While creating an atmosphere, happy clients and happy employees takes fantastic soft skills, “knowing your numbers” will help your spa or salon find its place in the market.

Think of a KPI indicator as a map. You have a destination point, and you have your path, with a giant “you are here” sticker as well showing where you currently stand. You talk to your clients about balance, and the numbers are a big part of the balancing act for any business. Here is a helpful list of the top KPIs for spas and salons.

1. Cost Per Lead (CPL)

Every marketing effort should be tracked, since what gets measured, gets improved. It helps you understand how much you are spending on leads, and if you should continue to invest. For example, if you are getting $25/lead off of Google, and a bunch of traffic off of Facebook, but 0 leads, you should reconsider the time, money and energy you are investing in Social.

CPL = Cost of Marketing Program/Total Number of Leads

Note when calculating, a lead has two main aspects:

They are actively searching for the service

They provide a way for you to contact them for follow up

It is a good idea to put aside a small amount of your budget, such as 10%, to experimental initiatives to make sure your marketing mix is the right one for your spa, your target market and your area.

2. Average Treatment Rate (ATR)

You may think that because your salon or spa is busy, it is successful, but that is not necessarily true. At the end of the month, it is a good idea to get an idea about how much you are making for each treatment as well.

ATR = Total Number of Treatment Hours Sold / Total Number of Treatment Hours Available

As you look at this metric, one thing to take into account is that some treatments take longer than others. So – a 2-hour treatment of $180 is less efficient than a 1-hour $100 treatment.

3. Spa Productivity or Occupancy

With the rent or mortgage costs associated with the space typically being the biggest cost associated with a spa understanding the usage of treatment rooms is an important indicator of how productive your space is.

Spa Productivity = Total Number of Treatment Hours Sold / Total Number of Treatment Hours Available

4. Capture Rate: Retail

Spa and Salon revenue comes from two sources: services and retail sales. According to Winn Claybaugh, co-founder of Paul Mitchell Schools, “Per square footage, the footage devoted to selling products [like shampoo and hair gel] is more profitable than footage devoted to service”.

Capture Rate = Total Retail Guests/Total Spa Guests

5. Net Promoter Score (NPS)

Offering an exceptional experience will not only keep your guest coming back, but they will also tell their friends. Best of all, they may even take a “selfie” of them looking fabulous after their treatment! Technically a loyalty measure, the Net Promoter Score (NPS) is a fantastic way to measure this on a quarterly basis.

NPS= % Promoters-% DetractorsYour NPS can help you in your marketing efforts, by asking promoters to leave reviews or recommend to their friends and family and it can help prevent churn in terms of the detractors.

6. Repeat Guests

Repeat guests generate a higher return on every dollar spent getting them in the door. Also – practical experience shows that repeat customers tend to spend more on subsequent visits as well. This metric is calculated through the following:

Total Number of Repeat Guests/Total Number of Guests

7. Employee Retention

Customers are more likely to develop a bond with their stylist or therapist than the brand itself. If you have an employee who leaves, you risk their clients moving with them. For this reason alone (even though there are many others), you want to make sure your team is happy. Employee retention is measured as follows:

Total Number of Employees that Left for a Period/Total Employees at the End of that Period

8. GOPPATH

This is a strong indicator of performance because it looks at how good you are at generating revenue, controlling expenses and making strong utilization of your hours.

EBITDA is a measure of a spa or salon’s operational effectiveness. It is a way to evaluate a company’s without having to factor in financing decisions, accounting decisions or tax environments. Although difficult to say or even fully comprehend for gym owners who have come up through the health and fitness operations side, it is a key indicator.

EBITDA shows how good your business is at generating cash thus your business is valued as multiples of this metric.

While you encourage your clients to balance mind and body, at the same time, you want to make sure your KPIs are balanced. With FranchiseBlast’s Scorecards, you can track all of your metrics in one place, and modify metrics on the fly. Learn more here…

Pretty much every Franchise Coach has heard this from their franchisees: one of the biggest trends for customers of franchise locations is on-demand food or off-premise. But, as discussed in an earlier post, there are two options when it comes to delivery for the franchisor as an organization, and the franchisees themselves.

Creating ordering capabilities in-house

Using a third-party service or food delivery service app

Today, we are going to look in-depth at the third-party services, and explore key considerations for restaurants in franchising working with these services. There are many new considerations to understand when looking at this trend, and what matters in terms of supporting your franchisees with this transition.

What is a Food Delivery Service App?

Whether it is the ubiquitous GrubHub or UberEATS, high-end Caviar or 45-minutes or less hub, DoorDash, a food delivery service app is more like having a virtual foodcourt in your pocket. There are a lot of these apps right now in a “land-grab” for space, which are both regional and national. If the customer does not have a specific restaurant in mind, they can simply scroll through the app and browse by city, address, cuisine or menu. Do you have a very specific craving for Korean Pork Bone Soup, “Fall Off the Bone” Texas ribs? Well, with a food delivery service app, you can even search by menu item.

If your franchisees are considering signing up for one or many of these services, you will want to take a few things into consideration.

Market Dynamics

As your Marketing Director will tell you, different areas have different advertising dynamics. For Pay Per Click (PPC) advertising on Google for example, the franchisee in Brooklyn, New York will have a different experience than the one in Tulsa, Oklahoma. Why? Because there is more competition in Brooklyn for just about… everything, driving the cost of advertising up.

The same dynamic is at play in Food Delivery Service Apps. There are some cities that will rely on the most popular apps-only, such as GrubHub or UberEATS. There are other cities where there is such a proliferation of apps, that franchisees need to have several iPads to keep up.

Take Mighty Quinns BBQ based in New York for example. In order to keep up with the different apps they manage their different ordering system using several iPads for each delivery service. For Christos Gourmos, co-founder of the company, he says that the back-end would be the biggest headache – as in – it is not about bringing in the customers, it is about defining who is paying.

The opposite is true for markets where there is no proliferation of apps. For some Australian businesses for example, the 35% premium just one app charges means that the cost of entry is too high.

Finances and Fees

Food Delivery Service Apps offer a challenge for franchisors, because of the added fees can put a lot of pressure on the franchise model. For example, while the apps can offer up to 35% onto the price of a meal, a franchise like Dominos can charge their franchisees just 1% for their delivery service. This is why so many brand aggregators and large franchisors are either building this capability in-house, or are partnering or taking ownership in some of these outfits. For franchisors without this option, here are some things to consider. Note, that all quotes are different according to the application and the region, so the percentages are just for illustration.

Non-Sponsored Post Commission: A “non-sponsored” listing, means you will simply be listed on the site, with no special treatment in terms of priorities. In some markets, it can be 15% for this cost.

Sponsored Post Commission: A “sponsored” post means that your offering will move up in the rankings, and can cost about 20%.

Delivery: While it is possible to use these applications without using delivery, there is an added 10% for the delivery for those who need it.

In franchising, we are able to take advantage of economies of scale – and creating the ability for franchisees to do their own delivery is a great start in terms of helping them take control of the costs. Another strategy restaurants use is to have one price on the apps, and another price in the restaurant or on their own website.

Marketing

Similar to the “daily deals” website such as Groupon, the risk of food delivery apps is that the customer may move the relationship from the restaurant to the application. The flexibility the consumer gets with the app can be at the expense of the franchisee. As a result, you want that food and packaging to “hook” the consumer so the next time they order they will go directly to the restaurant. Also, the data behind the consumer behavior is lost to the app, meaning some of your market intelligence abilities will be limited.

Operations

While most experts see consolidation and specialization in the future, the reality today is that there are a lot of these apps out there. As a result, taking orders from multiple apps will create duplicate data entry, which creates opportunities for human error. Also – the disconnected systems creates some administrative challenges – ones that can create a subversion of royalty fees.

Another new trend noted by McDonalds is that on-demand has created new occasions for eating. They have found that late-night eating is a new “thing” that would not be covered by a standard restaurant operating hours.

One interesting form of consolidation for brand aggregators to consider is the trend of Ghost Kitchens also known as “Virtual Kitchens”. This is where there are several brands under one roof, and it is delivery only. These kitchens are growing in popularity across North America and the UK creating a need for highly versatile chefs, but removing the need for “front of the house” staff.

The Future?

Restaurants are not going away… but they are changing. One way to navigate change is by having flexible technology that goes with it. At FranchiseBlast, our brand promise is “You set the course, we’ll help you get there. Let’s enjoy the journey.” Our flexible system can move and grow with you, whether you are a traditional brick-and-mortar restaurant or a ghost kitchen. Request a demo to get started.

VIRGINIA BEACH, Va. July 26th, 2018: In an ongoing commitment to its core mission, Liberty Tax is employing mobile-friendly technology giving KPI data needed at a glance for their 4,000 locations. Liberty Tax is dedicated to offering the flexibility of a personal tax consultant with the security of a large, established company – a mission furthered by this investment in technology.

Supported by FranchiseBlast’s Brand Consistency tools, Liberty Tax Services is enhancing its ability to track the metrics of success that each location relies on to thrive. FranchiseBlast, a Canadian technology firm, provides a comprehensive suite of tools for franchisors looking to streamline their field coaching processes. With this in their arsenal, the franchisor not only ensures operational compliance but also coaches franchisees to improve their performance.

“We pride ourselves on the total level of support that we offer our franchisees,” said Martha O’Gorman, Chief Marketing Officer at Liberty Tax. “Keeping a brand consistent across all locations is a big part of the value that we provide.”

The tools will not only help from a Marketing perspective; the operations team will also benefit.

“A franchise coach’s time is much better spent actually connecting with people, rather than punching in numbers and copy-pasting,” said Dean Hatzitheodosiou, Sr. Director of Sales of FranchiseBlast. “Our tools make these processes more efficient, so coaches can get back to doing what they do best.”

The software company traces its roots back to the food service industry, but it is more than that today – they offer solutions for a diverse array of industries including Financial, Home Care, Fitness and Education. A tailored version of FranchiseBlast’s Brand Consistency suite is expected to roll out to all Liberty Tax Services locations by the end of 2018.

About Liberty Tax, Inc.

Founded in 1997 by John T. Hewitt, Liberty Tax, Inc. (NASDAQ:TAX) is the parent company of Liberty Tax Service. During tax season 2017, Liberty Tax prepared over two million individual income tax returns in more than 4,000 US/Canadian offices and online. Liberty Tax’s online services are available through eSmart Tax, Liberty Online and DIY Tax. Liberty Tax also supports local communities with fundraising endeavors and contributes as a national sponsor to many charitable causes. For a more in-depth look, visit Liberty Tax Service and interact with Liberty Tax on Twitter and Facebook.

About FranchiseBlast

Since 2007 FranchiseBlast has helped franchises in their quest for operational excellence. With 13,000 locations from over 90 brands, FranchiseBlast combines elegant usability with turn-key quickstart programs. FranchiseBlast’s clients include brand aggregators such as Focus Brands and individual franchise brands such as Tide Dry Cleaners, Pita Pit and Tropical Smoothie Café among many others.

As franchisors, we have many customers – including franchisees and managers. In a franchising community so broad, it is shocking that many store managers and franchisees can have the same complaint. According to multi-unit management expert, Jim Sullivan, in his book Multi Unit Leadership, the following complaints are consistent.

The top 5 complaints that store managers had about their Multi-Unit Leaders:

Not enough face-time.

Store visits where MULs worked positions rather than offering specific direction, insight, coaching and feedback.

Pre-occupation and distraction on the MUL’s part during store visits via constant phone, text and e-mail interruptions.

Too much “telling what to do” not enough “why that problem occurred.”

Changing priorities or failing to clarify objectives.

Does this sound familiar? Whether you are a business coach or a multi-unit leader, it likely rings true. Sullivan continues with this insight:

Too much of what passes for multi-unit-leadership training and development today was developed decades ago when the industry, customer, crew, technology were radically different. The leap from “telling what to do” to “telling why and how to do” is a skill that takes patient coaching guided practice and innate skill.

So – here are some tips at managing from a place of “why” instead of managing from a two-dimensional checklist perspective.

Purpose

In Simon Sinek’s book, Start with Why, he contends that leaders who help teams understand the “why” behind what they are doing are more successful than those who do not. Sinek explores the leadership of legends such as Steve Jobs and Martin Luther King.

Bringing this concept down to the earth, helping franchisees and store managers see how their “piece of the puzzle” fits in with the rest if it can go a long way. People want to understand the purpose first – and if they fully understand that, the actions follow more naturally from a place of motivation.

Find the Gaps

There are many coaching models that have a step around “finding gaps” such as the CIGAR Model.

C – Current Reality

I – Ideal

G – Gap

A – Actions

R – Review and Reinforce

Getting the franchisee or store manager to discover the gap between the current reality and the ideal can be incredibly helpful in terms of making the conversation about their goals, and not yours. Over time, you will discover a lot of similarities in goals, and a natural alignment.

Talk Tentatively

When you are in a difficult conversation, it is a good idea to ask questions, and “test” certain concepts rather than making authoritative statements. Although you may still need to bring messages from head office, this being done in a gentler, tentative way can be extremely helpful.

Technology

When it comes to distraction, technology can be your best friend or your worst enemy. Technology, specifically built for franchise business consultants or multi-unit manager in mind can help you focus less on the process of auditing and more on the audit itself.

Automatically create “action plans” for stores if you see an opportunity for improvement. For example, if the store is choosing to do a seasonal event, you can give them a step-by-step process.

If you see patterns in violations, you can create a training module – one initiative that “lifts all boats”.

Get the franchisee to send you pictures before-hand of things like wrapped vehicles so you can focus on more face-time.

All of these features, and many more, are included in FranchiseBlast’s Field Audit app.

If you are in the health and fitness industry, according to research you have two important things on your mind: the success of your clients and the contribution you are making to your community. But you cannot help your members OR your community if you are not properly tracking the health of your business.

Just like your members need to measure repetitions and step on the scale in order to succeed, you as a business owner need to measure the health of your business on a regular basis as well. Below are some recommendations on 9 Important KPIs in for health and fitness franchises.

1. Cost Per Lead (CPL)

If you are going to only measure one metric in your marketing programs, cost/lead is the one most worth the effort. It helps you understand how much you are spending on leads, and if the methods that you are using are effective. For example, if you are getting $25/lead off of Google, and $100/lead off of your print advertising, you will want to reconsider that print ad buy in the future.

CPL=Cost of Marketing Program/Total Number of Leads

Note when calculating, a lead has two aspects:

They are actively searching for the service

They provide a way for you to contact them for follow up

Ensuring you have the above, creates a fair measure for your sales team later down the line. It is a good idea to dedicate about 10% of your budget to experimental initiatives to make sure your marketing mix continues to be the right one.

2. Conversion Rate

Conversion rate helps you understand your gym’s ability to turn leads into members. Typically seen as a sales metric, it shows how your sales team is doing with the leads provided by marketing.

Conversion Rate=Total New Members/Total Number of Leads

If this metric is weak, it may be an indicator that your facility is not up to par – you may want to look at renovations, or a refresh of equipment.

3. Active Members

This is a basic but necessary metric will outline your success on the most elemental level. Measuring the growth and decline of members compared to the previous year is a fantastic way to track where you are in terms of the big picture. It is calculated below:

Growth Rate = (Present-Past)/Past

If your absolute member count is low compared to benchmarks, and your growth rate isn’t high, then you need to focus on increasing your member base through marketing efforts or by reducing churn.

4. Revenue Per Client (RPC)

This commonly-used KPI provides a sense of clarity in terms of where you are in your business.

RPC = Annual Revenue/Total Number of Clients

If this is low, look for upsell opportunities such as personal training, niche classes or supplements.

5. Revenue Per Square Foot (RPSF)

With the rent or mortgage costs associated with the space typically being the biggest cost associated with the industry, it is healthy to look at this often-neglected metric. In a multiple-location environment, this metric tells you what spaces are working, and what ones are not working for you. Also – if your RPSF is very low, you may want to consider a smaller space unless you intend to grow rapidly.

RPSF=Annual Revenue/Total Square Footage of Facility

6. Utilization Rate

Utilization Rate is an amazing metric in this industry because it measures how much you are actually using your resources. If you offer personal training, for example, how much is the trainer actively engaged in the process of training? If you are renting a room for 8 working hours a day, and only using it for 4, then there is an opportunity to add more classes.

Utilization Rate=Total Hours Used/Total Hours Available

7. Net Promoter Score (NPS)

Member satisfaction is both a customer service measure and a marketing measure. Why? Increasingly, brand is a verb, and you want to make sure that the experience that people receive at your gym is one that leaves them satisfied. Technically a loyalty measure, the Net Promoter Score (NPS) is a fantastic way to measure this on a quarterly basis.

NPS= % Promoters-% DetractorsYour NPS can help you in your marketing efforts, by asking promoters to leave reviews or recommend to their friends and family and it can help prevent churn.

8. Retention Rate

Retention rates is something that the fitness industry has struggled with for a long time and churn of members is a common conversation topic at franchise conventions. In general, having a strong retention rate means that you are keeping your brand promise. You can measure this over the course of a month, quarter or year.

Retention Rate: Existing Clients at End of Period/Existing Clients at Beginning of Period

If this is low, it is a good idea to do a root cause analysis on why people leave. Having a “leaky bucket” of customers, means that you have to spend more on marketing upfront.

EBITDA is a measure of a gym’s operational effectiveness. It is a way to evaluate a company’s without having to factor in financing decisions, accounting decisions or tax environments. Although difficult to say or even fully comprehend for gym owners who have come up through the health and fitness operations side, it is a key indicator.

One of the biggest challenges to rolling out an effective franchise scorecard program is getting buy-in for KPIs. A lot of time both franchisors and franchisees can see the need for them but are concerned about making any significant changes outside of the original franchise agreement. Here are some tips based on what is happening in the franchise community right now.

1. Document Process of Developing KPIs

It is important to remember that franchisees are independent business people and need to understand the rationale behind the numbers. That is why the favourite question of your best franchisees is “why?”. If you carefully document how the KPIs will enhance the brand of the system and how it will benefit each individual location, you can have your bases covered in terms of KPIs. The KPIs were not pulled from thin air – they were based no the franchisor’s reasonable judgement on key success factors.

Now, more than ever, you probably hear your franchisees complaining about competition. So – talking about how the KPIs were developed to beat local competitors is a great way to get buy-in. After all, you are proactively solving problems for your franchisees, which is a key value-add of being part of the system.

2. Seek Franchisee Buy-In Before Implementation

The best-case scenario is to get your Franchise Advisory Board (FAB) to co-create your KPIs with you. Interestingly, these successful franchisees can see the weaker ones as hurting the brand and their own investment. Getting your FAB to develop the KPIs with you and even connecting them with roll-out communications such as newsletters, webinars and social media can be a powerful tool for compliance.

If the FAB is not engaged in the initiative, having some of your larger franchisees adopt the KPIs ahead of time can also be a great boost for the initiative.

3. Use a “Carrot” rather than a “Stick” for Compliance

Encouraging positive behaviors, rather than punishing negative ones is a good rule of thumb in general, but it is more important than ever in franchising. Potential rewards include:

Eligibility for expansion.

More AdFund or PR support.

Being in the “spotlight” on webinars, internal case studies and social media.

All of these are great rewards and creates a positive energy around your program. It also mitigates the risk of a dispute.

Ready to Get Started?

FranchiseBlast’s Scorecards were built especially for franchisors and we have a deep understanding of this environment. Reach out to us to learn more about how Scorecards can help your franchise business.

Franchising is one of the most exciting communities in the world. There is no other place where there is so much entrepreneurship, creativity, and people who care about making a positive impact on their communities. But, that excitement can fall short when it comes to the every-day business of metrics and measurement.

When you have an organization full of people who are passionate about soft skills such as helping others grow, teaching, inspiring and creating positive change, it is tough to turn around and make them do something as mundane as staring at the numbers. But, seasoned veterans of the industry know how important it is to “know your numbers”, and getting to know them may be easier than you think.

1. Everyone Is Not on the Same Page

In a distributed organization like a franchise, people get in the habit about talking about the same things in different ways. It is tough to get training, marketing, field operations and even your multi-unit owners on the same page when all of them think differently. It is important to be “one franchise” rather than dozens or hundreds of small, local businesses. Having a single goal, reflected in a franchise scorecard, is a positive way to build consensus in the organization.

2. Franchisees and Team Members are Getting Disengaged

People like to have a sense of meaning in their workdays. If goals are misaligned, people can be told one thing by their manager, but hear something else from home office. This creates a “no win” situation for the person on the front lines, where they don’t know what winning or losing is. Having a scorecard, and everyone aligned with it helps people understand how they can best contribute.

3. Excel and Google Sheets Rule You (Rather than You Ruling Them)

In a lot of franchise organizations, there is a ton of intelligence that sits on the hard drives of individual computers. Have you ever had turnover, and had to frantically break into a computer to find a key tracking spreadsheet? How about phoning and texting former employees, trying to get access to that Google Sheet? Excel leads to silos and while these tools are getting more collaborative with Google Sheets the knowledge is often in many different places and difficult to reconcile. Having a scorecard means that the information is all in one place, and the right people have the right access.

4. Goal Planning Happens in Silos

A simple, clear, visual aid, when implemented correctly, can do the following:

Gives franchisees and team members clear goals to keep in mind while working on projects.

Enables franchisees and other stakeholders to see how objectives affect one another.

5. Complaints about Communication and Transparency

As the saying goes “the biggest error in communication is the assumption that it has taken place.” There is often a swinging pendulum in franchising when it comes to this important topic. When the franchisor communicates too little, there can be complaints of lack of transparency, even when the source of lack of communication is because the franchisor is too busy providing value for the franchisees! When there is too much communication, franchisees can become “numb” to it, and stop opening e-mails. Having a franchise scorecard helps you set goals once, and then people can review them in their own time at the rhythm that is right for them.

Ready to Create Positive Change with a Franchise Scorecard?

While change can be scary, it can also be invigorating to see how it can get everyone focused on the right things for your business. Having software for help you with your scorecards can be a great help. While we are clearly biased, we think that if you are in franchising, our franchise scorecard tool is the best – and hopefully the 13,000 locations that currently work with us will agree. Reach out to us to learn more.

The Driverseat franchise is cruising to lead emerging brands offering chauffeur, assisted transport and designated driver services. Founded by brothers Brian and Luke Bazely, in Waterloo, Ontario the franchise currently has 24 units in Canada, with several more poised to open in the next 12 months.

Driverseat, which has been in business for six years, and has been franchising for only five, charges a flat-rate for royalties. This system creates an environment of trust and openness with the franchisees. Learn about how CEO, Brian Bazely, uses this approach combined with authentic coaching to set franchisees up for success.

What is your role?

Brian: “I’m the Co-Founder and CEO of Driverseat and my brother, Luke is in the role of Co-Founder and President. I focus on Franchise Development, and growing the businesses of the Driverseat franchise owners. Luke focuses on our corporate location, as well as developing the technology.”

What did you do before-hand?

Brian: “I spent a significant portion of my career in executive management roles with retail companies such as Toys R Us and The Beer Store, a province-wide beer retailer in Ontario. About ten years ago, I became a franchisee of Anytime Fitness. Through that process, I fell in love with the whole franchising concept.”

What do you like about working at Driverseat and how has the company developed over time?

Brian: “Every day feels like we’re either as passionate or more passionate about the business. The excitement surrounding Driverseat is quite something. My focus is far more centered on the franchise owners; my experience tells me that this strategy is the best way to create a great experience for our customers. I know that when I truly care for my franchise owners that they’re going to have their coachmen, which is our term for drivers, provide amazing service for the customers.

Our franchise system and the supporting technology provides a great deal of flexibility. I find it very rewarding when we have a new franchisee who joins our organization and as is able to travel more, experience life more, or as an example, is able to coach their daughter’s soccer team because of the freedom that the business provides for them. That’s the part that gets me super-excited every day. My passion is for them and for what they can experience in being part of the Driverseat brand.”

What is different about how you collect royalties compared to other franchise systems?

Brian: “When we designed the business, we decided to charge a flat-rate royalty versus a percentage. We elevate that flat rate each year for new franchisees coming into the system but “freeze” it for existing units. As the business gets larger and more sophisticated, we feel justified and qualified in being able to charge just a little bit more. Currently, it’s a $419 flat rate per month.

It’s a different system and there is a lot of debate with our accountants and other franchisors regarding this topic. They ask: “Why would you continue to use a system like this?” The answer comes down to why we wanted to launch a franchise in the first place. We are passionate about our franchise partners and we want to spend our time helping them develop themselves and their businesses. We don’t want to spend a lot of time on things with negative energy, like auditing their books.”

What did you want to avoid when you selected this system?

Brian: “There’s a natural friction point that exists in franchising that industry veterans are very familiar with. When a percentage royalty is charged, a franchisee can spend some of their day finding ways to hide money or sales results so they can pay less overall. This is not a moral failing on the franchisees’ part, it is simply human nature. The franchisor is then forced, as a result, to spend their energy on trying to audit or find that money.

We looked at that and said, “That’s a lot of negative energy on something that actually doesn’t really gel with our governance.” When you’re a flat-rate system, there’s never a doubt in the franchisees’ mind. They do not suspect an “ulterior motive” on behalf of the franchisor when we are trying to help them grow their sales.

If we spend a little bit more time on a business quote that they need to put together for a large sale, for example, there’s never the thought that we might be doing it because we’re trying to increase our own royalties – they know that we are in it for them. We spend our day doing what energizes our corporate office team – creating success for our franchise partners.

Would you be able to provide me with some concrete examples of this strategy in action?

Brian: A pretty significant portion of our business is B2B where we provide chauffeur and shuttle services for employees – moving them between production plants or warehousing plants for example. Landing these accounts represents more work in terms of sales, but the revenue opportunities are also far greater.

About a year ago, one of our franchise owners had one of these B2B opportunities and we were passionate about helping him land it. We pushed him to do a better job with mapping, and explaining the services and technology. We helped him put a significant effort into the presentation package. As a result of the group effort, he landed the sale. They still provide service today to that same customer and it sparked other sales from there.

When working with franchisees, we talk to them about their personal goals as well as their professional goals. A personal goal of one of our franchisees was to do a better job at handling herself in meetings and to be more comfortable in public speaking.

We created a plan to help her do two things:

Present to a B2B prospect with her husband and business partner.

Have her build enough confidence to showcase her expertise in front of our franchise group at an annual conference.

I was able to really push her on this and hold her accountable to the goals that she set. It resulted in her doing more business meetings, and it resulted in them building an additional revenue line. Both their profit and revenue increased – on top of that, she was able to develop as an individual.

How does this system foster a sense of trust between you and the franchisees?

Brian: “There are only two things that we really focus on:

Top-line revenue and profitability for the franchise owner

Trust between home-office and the franchisees.

When we have profitable sites and they trust us, that becomes the magical mix. Everything that we do is focused around those two very important factors.”

Brian: “It comes down to the lifecycle of a franchise system. Percentage royalties feed a corporate office. That allows you to purchase additional talent, resources, and better technology. When you charge a flat rate, in the early days, there are times you’d like to have higher revenue at the franchisor level to drive higher performance.

It has forced us to be extraordinarily smart in how we spend money and how we develop programs. The first couple years we ran the franchise system with just Luke and me. We literally managed tech development, marketing, franchise support, and franchise development with just the two of us.

But not once in any day that we’ve been in business for five years of franchising, have we said, “I wonder if this stuff’s being reported correctly. I wonder if we need to create an audit and find out if this information is accurate”. There is no incentive for a franchise owner to misrepresent their dollars.”

What advice would you give someone who wants to try a structure like this?

Brian: “You have to be focused on the long game to do this. If you’re focused on the short game and you believe that you’re going to have a small number of franchise locations that you need to rely on, then it might not work.

We look at this from a long-game perspective and say, “It really doesn’t matter what happens in the first handful of years. This is really about, how do you get to between 2,000 and 3,000 locations?” And we believe this is the single best source for doing it. If you are going to commit, don’t look back. It’s perfectly acceptable to increase the dollar royalties each year for new locations coming in. But, don’t look back and don’t get fixated on what “could have been”.

With everyone we interview, we ask a series of fun questions! Here is Brian’s Q&A!

What new belief, behavior, or habits adopted within the last five years have most positively impacted your life?

I’ve embraced the belief that entrepreneurs today should really be part of the new rich as described by author, Tim Ferriss. We should look to create financial wealth but not just chasing the dollar every single day. Instead, we should create enough wealth that supports a lifestyle that we want to live. The new rich, for me, is about the ability to earn revenue, which then supports time with my daughters and my wife, and time travelling.

For franchise owners, I try and bring this to the surface with them. It’s about going out and having a strong business that’s very healthy financially, but not for the purpose of upgrading the Lexus car from this model to that model, (you can certainly go and do that as well). Instead, it is for the purpose of being able to enjoy life, enjoy your family, and enjoy time which is one of our most valuable assets.

What purchase of less than $100 has improved your life?

I really love being able to pleasantly surprise somebody that works with us with small things such as a lovely meal with loved ones. For me to purchase a $50 gift card to a brilliant local Italian place that’s right around the corner from our office is a fantastic gift for someone who has gone above and beyond. For $50, you can have an amazing lunch there.

What would you put on a billboard?

Brian: “Spend your life purchasing experiences, not products – experiences with friends, experiences over dinner, experiences in social settings and experiences in travel.”

Love Work by Chuck Runyon who is the founder of Self Esteem Brands. He’s a really outstanding leader. And the “Love Work” book really talks about passion and the culture he built within Anytime Fitness.

Good to Great by Jim Collins which is a factual study of how certain companies overperformed.

Industry folks are talking a lot about digital disruption in restaurants these days. According to Steve DeSutter, CEO of Focus Brands, “The industry is changing […] One of the challenges I’ve put in front of my team is, if we are not innovating and remaining relevant to our loyal customer, we’re losing.”

Driving this paradigm shift (and so many others) is the ubiquity of mobile phones, and their access to the marketplace. To put it in perspective, most people would rather lose their wallet than their phone — that’s how important they’ve become! Positive reviews have always been great for business but now they’re becoming essential. In fact, 33% of Google searches include starred reviews, and they’re no longer a “nice to have” — they’re a need to have.

We live in a noisy world – there are a lot of brands are clamoring for our attention. According to Steve Jobs, “Marketing is all about values. It’s a complicated and noisy world and we’re not going to get a chance to get people to remember much about us. No company is. So we have to be really clear about what we want them to know about. “

The retail transformation is here. According to Forbes, “e-commerce and shopping platforms such as Amazon — where 43% of all U.S. online retail sales are coming from.” With that in mind, let’s look at three franchise brands that are managing digital disruption beautifully.

To see the first two installments of our “Franchise Growth Trend Hunter” series, go to:

Dunkin’ Donuts

Units: 12,435

Overview: Dunkin’ Donuts has long been at the forefront of mobile marketing in response to digital disruption in restaurants. Since the beginning of the digital era, they have been capitalizing on its ability to connect with consumers. As such, the company’s DD Perks program boasts 8 million members.

They are also considering a rebrand, removing the word “Donuts” from its name to appeal to modern, health-conscious consumers. But that’s only the very beginning.

Dunkin’ is trying to make their strategy even more future-thinking, with steps that include the following two strategies according to AdAge: “Use the face recognition on the iPhone X to see whether someone looks tired and suggest a coffee delivery if so, Weisman suggested. It is exploring an integration with Outlook that could suggest ordering food and coffee when someone schedules a meeting.”

They also have a new “concept store” which allows mobile orders to go in a different line, going right to the front, accelerating the process for customers willing to dive in digitally:

Bottom Line: Embracing mobile technology holistically is a big part of connecting with today’s consumer – it does not stop at a rewards program.

McDonald’s

Units: 36,899 Restaurants Worldwide

Overview: McDonalds has kept pace with digital transformation through their partnership with UBEREats in 10,000 restaurants and their mobile app, which offers a pay option.

They call this transformation “Experience the Future”. According to Diginomica: “(2018 is) set to be a year of massive investment in new digital platforms, with most of $300 million of savings elsewhere being pumped into technology spend.”

There is also an in-store component to the initiative, for those who still like to go into the restaurants. According to the same article:

“In many of our markets we’ve scaled the Experience of the Future platform providing our customers a more seamless, personalized and enjoyment experience with digital menu boards, self-order kiosk, greater hospitality and a modernized look. They are telling us they like the new McDonald’s better. They are rewarding us with more frequent visits and they are spending more on average when they do. We deployed Experience of the Future in about one-third of the restaurants in the McDonald’s system, including nearly 3000 restaurants in the US.”

Bottom Line: Digital transformation will be on the fast food menu in many different forms. Taking a multifaceted approach helps follow the consumer’s new habits, while hanging on to the basics such as friendly service and delicious food.

Dominos

Units: 9,285

Overview: In an interesting “parting shot” as he left his role at Domino’s, outgoing CEO Patrick Doyle said that Domino’s is on the path to go from 60% to 100% digital.

Pizza has lead the way in terms of home delivery. But as others catch up, they are now needing to be even more progressive. Domino’s is doing a lot, including a digital assistant named DOM who can take phone orders, similar to Amazon’s Alexa.

Part of their innovation is to have digital “hot spots” which have no traditional address for food lovers who want pizza at the beach or in the park. There will be 200,000 locations created, maximizing access for their customer base.

According to Doyle:

“The ability to now deliver to spots without a traditional address and other rather unexpected sites will not only continue to drive incremental orders in the near term, but it is yet another meaningful step on our mission of industry-leading convenience; and the ability to order from us anywhere, anytime. This is thanks to outstanding technology helped by continued aggressive investment, sound operations, which are vital to making the Hotspots process work and proper execution participation at the store level, a nod to our terrific franchisees, managers and drivers.”

Bottom Line: Innovative franchisors can still focus on “what is next?” An investment in innovation now, can help manage the digital transformation of the future.

Conclusion: As the digital and mobile technology continue to disrupt the restaurant industry, savvy business are leveraging new technology to connect with their customers in unexplored ways.

At the forefront of this movement are major chains like Dunkin’ Donuts, McDonalds and Dominos, all who have shown themselves more than capable to remain at the bleeding edge of innovation.

By maintaining the old-school ideals of quality products and expedient service, these companies and those like them can increase profitability and customer satisfaction by leveraging the latest digital technology available.

How FranchiseBlast Can Help

As things continue to evolve, you want to make sure that your operations are still strong, and that your service is at a high standard. FranchiseBlast’s Auditing and Performance tools help organizations stay on track and evolve with the times.

With over 90 brands and 13,000 locations combined already using FranchiseBlast’s franchise software, you’ve probably already been a customer of one of our customers! I would bet that if you went to your local mall today (and no it doesn’t have to be the size of the West Edmonton Mall) you could walk into at least one franchise that uses our technology.

So how did we become the provider some of your favorites? For us, it is all about our people and the technology to back them up! And just like your business is constantly demanding more from you, we demand more from ourselves, so we can deliver updates that will continuously make running your business easier.

So what’s “fresh” with FranchiseBlast? A LOT! Our development team has been busy readying the app for your operations. Here are a couple of the updates that we have added to improve your experience and productivity at work!

Define Franchisee Groups and Leaders However You Like

Would you rank your franchisees only by their location? Of course not! It would be like ranking basketball players only for their height – not their speed, scores or more. With FranchiseBlasts’ new brand consistency widget you can now see how a unit ranks against others for a chosen key performance metric on your user dashboard!

Every business has different ways they like to categorize their units. You may like to segment them by who has a drive-through versus Joe in training who wants to segment them by how long they’ve each been in business. Maybe some of your locations offer off-premise services? Setting them up to be ranked against each other is another option. With millennials preferring to enjoy their meals at home off-premise locations are probably seeing dramatic growth next to their peers. The Store Key Performance Metric Leaderboard Dashboard Widget makes how you rank your locations, your choice.

Reviews and Operational Data: Better Together

Seeing how your business is ranking in reviews is now as easy as seeing your mentions on Twitter! To help out, we have two new APIs – one with the “gold standard”, Google Reviews and the other with ReviewTrackers.

Google Reviews are the most trusted 3rd party reviews and can affect your site –

ReviewTrackers is today’s leading online review management solution and the best way for enterprises to measure the customer experience. They help track reviews from trusted sites such as Yelp, Faceboook, and Open Table just to name a few.

So many people rely on 3rd party reviews over reviews on websites because they view them as more trustworthy. When was the last time you bought something without looking at a review? Keeping a close eye on those reviews can offer you insight into how your Franchisees are doing in the public eye and can be used to further aid brand consistency.